It took just seven days for the Terra (LUNA) ecosystem to plummet as prices fell from $85 on May 5 to nearly $0 on May 12. As the market slowly gained clarity on what happened, LUNA’s trading volume rallied strongly. over 200% on weekends.
Following the UST de-anchoring, which sent the LUNA market plummeting, LUNA investors mirrored the price drop as CoinGecko recorded the drop in trading volumes to $178.6 million on May 13 – a number that was last seen only in February 2021.
Terraform Labs CEO and co-founder Do Kwon sought damage control the same day he proposed a recovery plan for Terra’s return, which involves compensating UST and LUNA holders for having held the tokens during the crash.
Despite the risks involved, Terra’s “insane volatility” is still an attractive market for many short-term investors, primarily due to the fact that LUNA momentarily gained 600% in value on May 14.
(only need a few extra 100x to get back to $1)
—Luke Martin (@VentureCoinist) May 14, 2022
As investors try to recoup their losses while others try to profit from Terra’s comeback, LUNA’s trading volume jumped more than 200% to $6 billion. Prior to the crash, the LUNA ecosystem had consistently recorded over $2 billion in trading volumes on average over the past two years.
However, just as LUNA’s prices fell between the morning of May 10 and May 13, its trading volume surged as investors tried to cut their losses, ranging from $5 billion to $16 billion. At its peak, LUNA’s trading volume hit an all-time high of $16.15 billion on May 11.
Due to the various factors stated above, LUNA has regained its trading volume and is trading at $0.00025 at the time of writing. According to data from CoinMarketCap, crypto exchange Binance accounts for 68.26% of LUNA’s trading volume, followed by KuCoin at 9.52% and FTX at 1.13%.
Related: Crypto.com Unblocks Users, Rolls Back Faulty LUNA Trades That Did 30-40x
On Friday, Crypto.com users raised concerns about the cancellation of LUNA trades on the exchange’s mobile app.
Kris Marszalek, CEO of Crypto.com, later revealed that an internal error caused the system to display incorrect prices, leading many investors to take 30-40x profits.
There were a lot of customers buying at the wrong prices and of course some also jumped at the chance to exploit the glitch to the fullest.
We have reversed ALL trades.
Some customers have saved a ton of $ and thank us, some have not abused the glitch and are bashing us.
-Kris | Crypto.com (@kris) May 13, 2022
As a result, Crypto.com has temporarily blocked all users from trading. After a day of investigating the alleged system problem, Marszalek informed that “all user accounts have been reactivated”.
As Cointelegraph reported, the company offered $10 worth of its in-house Cronos (CRO) token as a token of goodwill to affected investors.